Mass. governor proposes higher income tax, lower sales tax

Patrick proposed raising the income tax to 6.25 percent from 5.25 percent at the state of the commonwealth address on Jan. 16. The sales tax will be reduced to 4.5 percent from 6.25 percent, with all proceeds going toward transportation, school construction and public infrastructure.

The income tax increase comes with doubled personal exemptions for taxpayers and eliminates some itemized deductions.

“With these changes our sales, income and business taxes will be comparable to and competitive with other states in the region and beyond with which we compete,” Patrick said.

Massachusetts needs to pay for the Big Dig expenses and maintain existing infrastructure. For education, Patrick advocated for universal early education, fully funded K-12 education and extended school time for high-need schools. In higher education, the governor sought to make college more affordable and expand community colleges.

“Every one of us here has to think twice before asking people who already feel strapped to contribute a little more,” Patrick said. “But this time, instead of sinking into the same old slogans, let’s have a serious, fact-based debate. The people we work for want the schools I have described; they want the rail and road services we have laid out; and above all they want the opportunity and growth these investments will bring.”

The state saved $11 billion by cutting about 6,000 positions in state government, managing health care costs, reforming transportation bureaucracy and ending pension system abuse, Patrick said. These changes were to prepare for the future.

“There is no good time to raise taxes,” Patrick said. “I know how tough the times have been on the people and families of the commonwealth. And though the worst of the recession is over, many, many families still face tough decisions and have deep anxiety about the future. I would not ask if I did not believe in my heart that investing meaningfully today in education and transportation will significantly improve our economic tomorrows.”